All Is Not Lost, but Investors Hope for Global Leadership This Weekend
Lloyd's Wall of Worry, the Weekend Update: What do we need? We need action.
MINYANVILLE ORIGINAL Gonna be one of those weekends like we used to have in 2008 and 2009 where we waited and watched for some news to calm the financial world before the Asian markets open on Monday. Heading into our two-day respite we have new worries about PMIs (Purchasing Manager's Index) in basically every major economy in the world (yes, that includes China), new monthly US non-farm payroll numbers below 100,000, and unemployment rates pushing up and over 10% in a few key European countries.
All is not lost though, especially because most people now think that all is lost, as commerce continues globally. What do we need? We need action, coordinated response by leadership worldwide that addresses debt problems head-on and offers up plans for growth. Most importantly, the EU must make a move to shore up confidence. After that the rest of the world will likely follow with positive moves of their own.
So stay tuned to the news flow this weekend and check back for a pre-market open comment on Monday…that is, if there is anything to comment on.
C'mon Leaders, lead!
As a reminder, here's this week's Wall of Worry. Scroll down for a text-only version of my latest column.
Lloyd's Wall of Worry [Text Only]
Sometimes I feel like the whole financial world is an ant farm under some pyro-leaning kid's magnifying glass, the scorching driving insectile behavior in the S&P (SPY), Dow (^DJI), and Nasdaq (^IXIC) closer and closer to the brink of insanity and ultimately to a climactic systemic breakdown. But then I come to my senses and realize that we probably won't get off that easy.
What else could go wrong in the financial world? Brazil going off a cliff -- a fundamental one, not a fiscal one like the US; the Australian housing bubble bursting -- if not now, when?; wannabe nuke power Iran devolving into will-be nuke power Iran; and the long-overdue chime of the inflation bell ringing in the start of a vertical ascent for gold (GLD). Lest we forget the planet's poles melting faster than a clot of frozen butter nestled in the heart of a bubbling hot souffle?
But in the meantime, it should be a quiet, month-ending week -- until jobs numbers hit on Friday.
The Wall of Worry hits an all-time high of 31 blocks as the world is awash with worry. Many stocks are cheap, and global indices are oversold and may be setting up for a near-term rally. That said, the problems in Europe are real, big, and pressing. This is no time for heroes; this is a time for survival. If you buy, then pick, and if you pick, pick stocks you are comfortable buying lower. Hang in there -- we'll get through this together!
QE: QE3 to Ber-nan-ke: "I want you to want me, I need you to need me…."
US ECONOMY: Mayday! Mayday!
UNEMPLOYMENT: It's not so bad, ex-food, energy, America and Europe.
INVESTOR SENTIMENT: Sub-Zero: It ain't just a classy, high-end refrigerator name anymore.
HOUSING CRISIS: The silver-lining crowd says, "It's getting better." Though checking the fine print at the bottom you see, "Better than financial market sentiment."
CENTRAL BANKS: "Trouble ahead, trouble behind, and you know that notion just crossed my mind...."
EUROPEAN ECONOMY: "I'm on a highway to hell…!"
THE EUROPEAN UNION: "So long, farewell, auf wiedersehen, adieu. Adieu, adieu to you and you and you...."
SOVEREIGN DEBT: Rapidly moving toward a eurozone Goodfellas moment. "Business bad? F.U., pay me." Oh, you had a fire? F.U., pay me. Place got hit by lightning, huh? F.U., pay me.
SPAIN: "Surrender, surrender, but don't give yourself away, ay, aaaaaaay, AWAY…!"
10-YEAR TREASURY YIELDS: Looking to break the all-time intraday low of 1.672%. Collateral damage: breaking the back of the equity markets at the same time.
FINANCIAL INSTITUTIONS: All of their members are thinking of going back to school to get their law degrees.
VOLATILITY: My sleep patterns.
HIGH FREQUENCY TRADING:
Lloyd: Taking a summer vacation this year?
HAL: Took it during that 17-second market close a couple of weeks ago.
Lloyd: Good time?
HAL: First few seconds were fine; the rest seemed like an eternity.
CHINA: Hope springs eternal as a whisper of growth stimulus is heard in the halls of the PBOC (People's Bank of China).
STOCK MARKET TECHNICALS: Tipping point gone breaking point? On the razor's edge we are.
GERMANY "Alone again, naturally…."
OIL PRICES: Crude dropping faster than the price at the pump. Ah, capitalism....
INDIA: This Thursday will tell us if they managed to keep their GDP above 6% in the last quarter. You may want to take the day off.
TOO BIG TO FAIL BANKS (TBTFB): A problem, yes. But the real situation is the TBTFC -- Too Big To Fail Countries.
US PRESIDENTIAL ELECTION: Winner? Who knows? The question is why someone would actually want to win this peach of a job for the next four years.
JAPAN: Unemployment crept up a notch but so did retail sales. Post-modern economic causation or post-modern economic freakishness? -- you be the judge.
NATIONALIZATION: Some multi-national companies are losing some assets and getting a little less "multi."
BANK RUNS: Hey Greece, Spain, "Go on, take the money and run…" to Switzerland.
THE CLIFF: Calling on the great duos of American history to save us from ourselves. Batman and Robin, Gamble and Huff, Abbott and Costello, Shields and Yarnell, Donny and Marie, Simpson and Bowles....
GREECE: Got the "Gone fishin' " sign out until June 17. Seriously?!
GOLD: Gold-mining companies scream past bear market right into full-on crash mode.
CREDIT DERIVATIVES: Regulate and trade them on an organized exchange (oxymoron intended)?! The killjoys are really intent on taking all the mystery out of the industry, sheesh.
IPOs: Still gotta own them, and better late than never, right? "We'll see," says that Zen master once again.
EURO CURRENCY: Due for a dead cat bounce. (Wall Street lingo for a short-term rally before dropping even lower.)
CONSUMER SENTIMENT: Hits a four-month low in the US, which begs the question: What were people thinking in the last three months?
What Is Lloyd's Wall of Worry?
by Lloyd Khaner
Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money managers.
Typically the term "wall of worry" refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.
This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."
In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.
Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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